Outcomes of a new effort at City Hall to study rental housing trends show challenges for both tenants and landlords — and that larger developments are asking for higher rents than smaller buildings.

A group of researchers from the University of Washington surveyed both landlords and renters in the Seattle area to learn about the state of the rental market and the effectiveness of recent ordinances enacted by the City Council.

While the Seattle Rental Housing Study did not deal with broader trends, such as overall rent prices, it did deal with the attitudes of those involved in the rental market. The research was required by two city ordinances passed in 2016 and included in the 2017 budget. Ordinance 125114 prohibits unfair practices for screening and choosing tenants and Ordinance 125222 limits security deposits and non-refundable move-in fees.

Despite their goal of aiding renters, the team’s focus groups had no familiarity with the new ordinances and were skeptical about their effectiveness.

“All of the renters that we spoke to in all of the focus groups, they expressed a high level of barriers to housing access,” research lead Kyle Crowder said at a July 24th meeting of the Seattle City Council’s renters rights committee about recent movers his team surveyed,

The barriers renters are referring to are more numerous than just the lack of affordability in Seattle, but that was one of the most frequently cited issues.

“The renters that we spoke to in our focus groups feel squeezed financially by the housing market,” Crowder, a professor of sociology at the UW, said at the meeting. “That was a common theme.”

Other problems mentioned by renters were a “lack of transparency in application/leasing process” and discrimination based on race, ethnicity, or source of income, especially for voucher recipients, according to the study.

In addition to Seattle renters, 4,391 local landlords took part in an online voluntary survey. While this was not a random sample, Crowder says that it was large and diverse. The research states that there are significant differences between landlords of a high number of units and landlords of a small number of units. For example, the former has more recently implemented large rent increases, and they are more likely to report increasing taxes as the reason for said hikes.

Additionally, the “large landlords,” as Crowder refers to them, are more likely to have dealt with a recent vacancy, which is significant because the new ordinances deal more directly with the leasing process.

“If the large landlords are the ones more frequently dealing with vacancies, they are the ones that are going to be more likely to have to grapple with those ordinances,” Crowder said.

There is a general dissatisfaction among landlords for these recent ordinances and intervention in the housing market, generally.

A vast majority said that ordinances to limit move-in fees, the First-in-Time ordinance, and the ordinance to limit criminal background checks will be ineffective and could even reduce housing access. Just 1 in 10 landlords reported support for interventions related to any of the goals of the ordinances.

Much of their dissatisfaction stems from a feeling that they are being left out of the legislative process. The study found that 89 percent disagree or strongly disagree with the idea that landlord’s perspectives are considered by policy makers.

(Image: Seattle Rental Housing Study)

One of the most interesting aspects of the study is a new tool developed to collect data on the rental market by taking information from online for-rent advertisements, which are indicative of trends in the market. This part of the research was led by UW graduate student Christian Hess.

(Image: Seattle Rental Housing Study)

Using the method, researchers were able to show something you might have suspected — the new, huge developments are asking for a premium from renters:

These data indicate that across all types of units, advertisements for units in larger buildings tend to have substantially higher rents than do those in buildings with smaller numbers of units. For example, in the first quarter of 2018, the median asking monthly rent for one-bedroom apartments in buildings with 2-19 units was about $1500, compared to just under $2000 in buildings with 20 or more units. This contrast clearly highlights the important role of smaller buildings in providing opportunities for relatively affordable rents.

The Seattle City Council will now have to grapple with how to use these findings in their future policy-making endeavors.

“Elected officials have known for many years the policies they need to enact to address the serious ongoing lack of housing affordability in the Seattle area,” Councilmember Kshama Sawant, who chairs the Human Services, Equitable Development, & Renters Right Committee, said in an email.

Sawant suggested the solution to the city’s housing crisis is publicly-owned affordable housing, totalling tens of thousands of units across Seattle.

“To build social housing, the City and the region need progressive revenue,” Sawant said. “It was shameful that seven of the nine City Councilmembers repealed the Amazon Tax.”

If nothing else, these ordinances and the study that stemmed from them created a platform for future research into the Seattle rental market.

“One of the biggest lessons that we can take out of this is the high potential for future conversations about this,” Crowder said.

In regards to building size and unit price; when was the last time we saw a new development with only 2-19 units? It’s been a very long time. We can assume these units are older with fewer amenities so of course they are cheaper. The larger developments are newer, have more amenities so of course they are higher in cost. This should surprise no one.

Financing requirements of new construction also require certain credit ratios which means you have to get the high rents or you do not get the loan. Owners of new buildings, or newly purchased buildings, have much less rent flexibility, often due to lending obligations. That is why the city should be creating programs to retain older buildings with lower rents. One suggestion would be tax breaks for maintaining lower rents in older buildings. Currently there is no incentive for keeping rents low.

You could say the same thing about middle-income homeowners. Nothing in place to check the unending march higher of property taxes while incomes for most people stagnate. Eventually they sell out and move, with their home torn down and replaced by 30 apodments of 300sq ft each, which does nothing for affordability either. We’re not shielding ordinary taxpayers either.

Why would you want to live in a building where a landlord couldn’t do a criminal background check? Do you really want to live next door to a convicted murder, serial rapist or child molester?

But you say , “What about non-violent drug offenses? Have you ever lived next door to a meth head? I have and believe me nothing like hearing pounding music, smashing and crashing around, constantly yelling, TV blaring, all night sex parties, slamming doors and people coming and going all night and day long to change your mind!

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